[shawnl112]

Lys City reports a compensated absences liability in its government-wide financial statements.
The salary rate used to calculate the liability should normally be the rate in effect:

a. When the compensated absences are to be paid
b. When the compensated absences were earned or are to be paid, or at the balance sheet date, whichever results in the lowest amount
c. At the balance sheet date
d. When the unpaid compensated absences were earned

[jeff]

Please post questions like these in the FAR study group…there's several of these “F10 – …..” on the front page 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Author]

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